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Settlement Agreement

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Sectors: Insurance
Governing Law: Louisiana, View Louisiana State Laws
Effective Date: January 01, 2000
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Exhibit 10.1



27 TH JUDICIAL DISTRICT COURT FOR THE PARISH OF ST. LANDRY



STATE OF LOUISIANA

NO: 09-C-5244 DIVISION: " C"

GEORGE RAYMOND WILLIAMS M.D,, ORTHOPAEDIC SURGERY, A PROFESSIONAL MEDICAL, L.L.C.



Versus

S.I.F. CONSULTANTS OF LOUISIANA, ET AL.

FILED: none DEPUTY CLERK

SETTLEMENT AGREEMENT
TABLE OF CONTENTS

No. Section Page 1 Definitions of Terms of General Application 1 2 Nature and Status of the Class Action and Related Proceedings 8 3 Basis for the Proposed Settlement 8 4 General Provisions and Purposes of this Settlement 9 5 Stay Order/Stand Down 12 6 Opt-Out Parties 13 7 Preliminary Approval of the Settlement Agreement and Certification of the Class for Settlement Purposes Only 15 8 Final Approval and Effect of the Agreement 15 9 Signed Releases/Assignment 18 10 Contributions to and Disbursements from the Class Settlement Fund 19 11 Insurance Assignment 20 12 Termination of Agreement 21 13 Additional Obligations of the PSC and CorVel 24 14 Miscellaneous Provisions 25 List of Exhibits 31

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27 TH JUDICIAL DISTRICT COURT FOR THE PARISH OF ST. LANDRY



STATE OF LOUISIANA

NO: 09-C-5244 DIVISION: " C"

GEORGE RAYMOND WILLIAMS M.D,, ORTHOPAEDIC SURGERY, A PROFESSIONAL MEDICAL, L.L.C.



Versus

S.I.F. CONSULTANTS OF LOUISIANA, ET AL.

FILED: none DEPUTY CLERK

SETTLEMENT AGREEMENTnone



This Settlement Agreement is made and entered into, on the dates indicated below, by and between the Plaintiff Steering Committee, individually and on behalf of the Class and the Plaintiffs, George Raymond, Williams, M.D., Orthopaedic Surgery, A Professional Medical, L.L.C. and Southwest Louisiana Medical Center dbs Lake Charles Memorial Hospital and Defendant CorVel Corporation, (" CorVel" ). This Settlement Agreement sets forth the terms, conditions, and provisions of a settlement of all Liability; it shall be Exhibit A attached to and made part of the Joint Motion for Preliminary Approval of Proposed Settlement to be filed in the Class Action; and it is subject to the recitals, definitions, terms, and conditions set forth herein.



RECITALS



WHERAS, on March 24, 2011, plaintiff, George Raymond Williams, M.D., Orthopaedic Surgery, A Professional Medical, L.L.C. filed a First Amended and Re-Stated Petition for Damages and Class Certification naming CorVel Corporation as a defendant and alleging that medical providers' bills in workers' compensation matters were discounted through PPO Agreements with CorVel or accessed by CorVel without the benefit of prior notice as required by La.R.S. 40:2203.1(B).

WHERAS, Plaintiffs allege that they are entitled to damages from CorVel Corporation under La.R.S. 40:2203.1(G) in an amount equal to double the fair market value of the medical services provided, but in no event less than fifty dollars per day of non-compliance or two thousand dollars, whichever is greater, together with attorney' s fees.



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WHEREAS, Louisiana medical providers have filed over one hundred (100) actions in the Louisiana Office of Workers' Compensation against CorVel' s payor clients alleging that CorVel' s payor clients violated La. R.S. 23:1201(F) by underpaying medical bills.

WHERAS, it is conceivable that CorVel' s payor clients may make demand for contribution or indemnification upon CorVel if they are cast in judgment by the Louisiana Office of Workers' Compensation.

WHERAS, CorVel denies the material allegations raised in this class action petition.

WHERAS, CorVel denies the material allegations raised by the OWC plaintiffs against CorVel' s payor clients.

WHERAS, CorVel denies that it that it would owe any contribution or indemnification to CorVel' s payor clients if they are cast in judgment by the Louisiana Office of Workers' Compensation.



1. DEFINITIONS OF TERMS OF GENERAL APPLICATIONnone



Unless otherwise expressly stated herein, the following terms, as capitalized and used in this Settlement Agreement, shall have the following meanings and definitions:

1.1 The term " Affiliates" when used in connection with CorVel shall mean CorVel Corporation and/or CorVel Healthcare Corporation, together with each of their respective predecessors, successors, assignors, assignees, subsidiaries, parents, affiliated entities, acquired entities, officers, directors, employees, agents, legal representatives, partnerships, joint ventures, attorneys, owners, and/or shareholders. Notwithstanding the foregoing, any and all Insurers are excluded from the definition of the term " Affiliate" to the extent of their obligations of defense or indemnity under policies of liability insurance as they pertain to the claims asserted in the matter bearing number 09-C-5244 on the docket of the 27 th Judicial District Court, State of Louisiana and the Related Proceedings only.

1.2 The term " Affiliates" when used in connection with the terms " Class Member" or " Class Members" shall mean and include their respective predecessors, successors, assignors, assignees, subsidiaries, parents, affiliated entities, acquired entities, officers, insurer, directors, employees, agents, legal representatives, partnerships, joint ventures, attorneys, owners, and/or shareholders.

1.3 The term " Agreement" shall mean and include this Settlement Agreement, all exhibits and attachments to this Settlement Agreement, and all judgments or orders of the Court approving or incorporating this Settlement Agreement.



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1.4 The term " Class Action" shall mean and refer to Suit No. 09-C-5244, Div. " C," on the docket of the 27 th Judicial District Court in and for the Parish of St. Landry, Louisiana.

1.5 The term " Class" shall mean the persons and/or entities included in the Class Definition.

1.6 The term " Class Definition" or " Class as Defined" shall mean and refer to the following:



" All medical providers, institutions, and facilities that have provided services to workers' compensation patients pursuant to the Louisiana Workers' Compensation Act, LSA-R.S. 23:1021 et seq., and whose bills have been discounted, adjusted, paid on a reduced basis, or otherwise paid at less than the billed amount pursuant to a Preferred Provider Agreement contracted with CorVel or owned or operated by CorVel. "



In the event the Court should alter or modify the above class definition, and such amended class definition is accepted in writing by the PSC and CorVel, such amended class definition shall be considered the " Class Definition" or " Class as Defined" under this Settlement Agreement, and all references to " Class Definition" or " Class as Defined" in this Settlement Agreement shall mean and refer to such accepted amended class definition.

1.7 The terms " Class Members" or " Class Member" shall mean and refer to those persons and/or entities who or which are included within the Class Definition andnone do not timely opt out. The terms " Class Members" or " Class Member" shall not include the Opt-Out Parties.

1.8 The term " Class Representatives" shall mean and refer to George Raymond Williams, M.D., Orthopaedic Surgery, A Professional Medical, L.L.C. and Southwest Louisiana Hospital Association d/b/a Lake Charles Memorial Hospital.

1.9 The term " Class Settlement Fund" shall mean and refer to the total amount of settlement funds deposited in the Escrow Account pursuant to Section 10.1, together with all interest earned or accrued thereon, and less (a) the charges, expenses, etc., specified in the Escrow Agreement, and (b) the reserves, if any, established in furtherance of this Settlement Agreement.

1.10 The term " Class Settlement Notice" shall mean and refer to the legal notice of the terms of the settlement embodied in this Settlement Agreement which is to be provided in accordance with the order of the Court, articles 591, et seq. of the Louisiana Code of Civil Procedure, and the terms of this Settlement Agreement.

1.11 The term " Court" shall mean and refer to the 27 th Judicial District Court in and for the Parish of St. Landry, Louisiana, and the Honorable Alonzo Harris, or his successor.



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1.12 The terms " Court Appointed Disbursing Agent" or " CADA" shall mean and refer to the accounting firm to be appointed by the Court, after consideration of the recommendations of the PSC and CorVel. The accounting firm of Bourgeois Bennett, LLC, CPAs, shall be proposed for use as the CADA.

1.13 The term " Effective Date" shall mean and refer to the first business day following the date that the Final Order and Judgment becomes Final and non-appealable, or such other date as may be agreed to in writing by the PSC and CorVel.

1.14 The term " Episode" shall mean and refer to and include each and every event, circumstance, and/or situation upon which allegations have been made or could have been made relating in any way to repricing, payment for, or reimbursement of a Provider' s bill for medical services or supplies furnished to a workers' compensation patient from January 1, 2000 through the Effective Date of the Settlement, and including but not limited to, claims that discounts under provider contracts or the manner or absence of notice of discounts violated Louisiana workers' compensation laws or regulations or any provisions of the Louisiana Any Willing Provider Act, including La. R.S. 40:2203.1, and/or the Louisiana Workers' Compensation Law, La. R.S. 23:1021, et seq. , and/or that these discounts were not applied appropriately, that notice or payment was insufficient, inadequate, improper, or untimely, or that reimbursement amounts for Provider charges were computed incorrectly, provided that the bill was discounted pursuant to a PPO contract owned or operated by CorVel or contracted with CorVel or any of its Affiliates, including but not limited to CorVel' s CorCare network and MedComp USA PPO network.

1.15 The term " Escrow Account" shall mean and refer to the interest-bearing escrow account to be established and administered in accordance with the Settlement Agreement and the Escrow Agreement. All interest accrued in the Escrow Account, from the date of deposit of settlement funds, shall be distributed pursuant to the terms of the Escrow Agreement.

1.16 The term " Escrow Agent" shall mean and refer to the escrow agent under the Escrow Agreement to be appointed by the Court, after consideration of the recommendations of the PSC and CorVel. First NBC Bank, New Orleans, Louisiana, shall be proposed for use as the Escrow Agent.

1.17 The term " Escrow Agreement" shall mean and refer to an agreement substantially in the form attached hereto as Exhibit 1.

1.18 The term " Final" shall mean that: (a) the Court shall approve the Settlement Agreement in all respects and enter a Final Order and Judgment, and (b) either no timely appeals,



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writs, petitions, lawsuits, or requests for court review or extraordinary relief have been taken within seventy (70) days from or with respect to such Final Order and Judgment, or if any such appeal, writ, petition, lawsuit, or request for court review or extraordinary relief has been taken from or with respect to the Final Order and Judgment, and that Final Order and Judgment has been affirmed without revision and there is no further right to appeal, petition, bring a writ or lawsuit or request court review or extraordinary relief from or with respect to such judgment, order, ruling, or decision, unless otherwise agreed to in writing by both Thomas A. Filo, on behalf of the PSC, and John V. Quaglino, on behalf of CorVel (such agreement not to be unreasonably withheld).

1.19 The term " Final Order and Judgment" shall mean and refer to the order and judgment to be entered by the Court pursuant to Section 8.2 below.

1.20 The term " CorVel" shall mean CorVel Corporation and its affiliates.

1.21 The term " Insurer" shall mean and refer to those persons or entities who/which may owe CorVel obligations of defense or indemnity under policies of liability insurance for the claims asserted in the matter bearing number 09-C-5244 on the docket of the 27 th Judicial District Court, State of Louisiana and the Related Proceedings.

1.22 The term " Liability" shall mean and refer to all claims against and/or potential liabilities of the Released Parties of whatever nature arising out of, related to, or connected in any way with any and all Episodes, regardless of whether the claims, liabilities, and/or resulting damages are not yet known or manifested or whether such claims, liabilities, and/or resulting damages are known or unknown, asserted or unasserted, including but not limited to the Released Party' s liability for contrib ution, indemnification, contractual liability, statutory violation and/or tort, to any other person or entity.

1.23 The term " Notice Plan" shall mean and refer to the plan for disseminating the Class Settlement Notice.

1.24 The terms " Opt-Out Parties" or " Opt-Out Party" shall mean and refer to those persons and/or entities who or which are included within the Class Definition but timely opt out of the Class pursuant to the procedures specified by the Court. Unless otherwise ordered by the Court, to opt out of the Class, a putative Class Member must take timely affirmative written action pursuant to Section 6.1 and the procedure to be approved by the Court, even if the putative Class Member desiring to opt out of the Class (a) files or has filed a separate action against any



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of the Released Parties, or (b) is, or becomes, a putative class member in any other class action filed against any of the Released Parties.

1.25 The term " Opt-Out Reserve" shall mean and refer to the reserve that may be set aside within the Escrow Account pursuant to Sections 6.3 - 6.5.

1.26 The term " Order of Preliminary Approval" shall mean and refer to the order to be entered by the Court pursuant to Section 7.1.

1.27 The terms " Parties" or " Party" as referring to this Settlement Agreement shall mean and refer to CorVel, the Class, the PSC, and the Plaintiffs.

1.28 The terms " Plaintiffs" or " Plaintiff" shall mean and refer to the named plaintiffs and Class Representatives in the Class Action.

1.29 The terms " Plaintiffs' Steering Committee" or " PSC" shall mean and refer to the following attorneys appointed by the Court:



Thomas A. Filo, Chairman and Liaison Counsel
Stephen B. Murray
Arthur M. Murray
Stephen B. Murray, Jr.
John S. Bradford
William B. Monk
Michael K. Cox
Patrick Morrow



1.30 The terms " Preferred Provider Organization" and " PPO" shall mean and refer to preferred provider organization as defined in La. R.S. 40:2202(5).

1.31 The term " Provider" shall mean and refer to any provider as defined in La. R.S. 40:2202(6) and/or La. R.S. 23:1021(6).

1.32 The term " Related Proceedings" shall mean and refer to all proceedings brought by any Class Member or any of its Affiliates against any of the Released Parties, other than the Class Action, whether in the Office of Workers' Compensation courts, state court, federal court, or any arbitral forum in which any claims and/or defenses related to any Episode have been asserted that have led to, or could lead to, Liability on the part of the Released Parties.

1.33 The terms " Released Parties" or " Released Party" shall mean and refer to CorVel and all Affiliates thereof and all of their respective payors, clients, contractors, or any entity or person, who paid or repriced/adjusted an invoice for medical services provided to injured workers that was discounted or reduced under a PPO network owned or operated by CorVel or its Affiliates or a PPO network contracted with CorVel or its Affiliates. Notwithstanding the foregoing, any and all Insurers are excluded from the definition of the term " Released Party" to the extent of their obligations of defense or indemnity under policies of liability insurance as



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they pertain to the claims asserted in the matter bearing number 09-C-5244 on the docket of the 27th Judicial District Court, State of Louisiana and the Related Proceedings only.

1.34 The term " Settlement Agreement" shall mean and refer to this agreement, together with all of its exhibits and attachments, and any properly perfected amendments.

1.35 The term " Special Master" shall mean and refer to that person appointed, or to be appointed, by the Court, with the consent of counsel for the Parties, pursuant to La. R.S. 13:4165, to assist the Court, in cooperation and coordination with the PSC, with the management of the Class Action. Patrick A. Juneau shall be proposed as the Special Master.

1.36 The term " Stay Order" shall mean and refer to the order to be entered pursuant to Section 5.2 below.



2. NATURE AND STATUS OF THE CLASS ACTION AND RELATED PROCEEDINGSnone



2.1 Stated generally, the Class Action and Related Proceedings involve, among other claims, claims for injuries and/or damages allegedly related to Episodes.

2.2 Stated generally, the Plaintiffs and the Class allege (and CorVel denies) that such damages are the responsibility of CorVel.

2.3 The claims involved in the Class Action and Related Proceedings have been substantially litigated and/or are substantially understood, such that the Parties are in a reasonable position to assess the merits and weaknesses of their respective claims and defenses.

2.4 Substantial time and effort has been expended by the Parties and their counsel in negotiating this Settlement Agreement.



3. BASIS FOR THE PROPOSED SETTLEMENTnone



3.1 As a result of the extensive litigation to date, the Plaintiffs and CorVel entered into negotiations to settle the Class Action and Related Proceedings regarding the Liability of the Released Parties , taking into account the following considerations: (a) the merits of the complaints or the lack thereof covered by the Settlement Agreement; (b) the relative strengths and weaknesses of the Class' claims; (c) the time, expense and effort necessary to maintain the Class Action and/or Related Proceedings to conclusion; (d) the possibilities of success weighed against the possibilities of loss; (e) the range of final judgment values; (f) the legal complexities of the contested issues in the Class Action and Related Proceedings; (g) the risks inherent in protracted litigation; (h) the magnitude of benefits to be gained from immediate settlement in light of both the maximum potential of a favorable outcome with the attendant expense and



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likelihood of an unfavorable outcome; and (i) the fairness of benefits to or from an immediate settlement under all of the foregoing considerations.



4. GENERAL PROVISIONS AND PURPOSES OF THIS SETTLEMENTnone



4.1 The Parties have reached agreement on the terms of a settlement of claims in the Class Action and Related Proceedings, through the establishment of a conditional settlement class to afford a procedural vehicle by which all potential Liability of Released Parties to Class Members may finally be concluded and settled. The Parties agree that proceeding in this manner is in their best interests and also shall contribute to judicial efficiency.

4.2 In entering into this Settlement Agreement, each Party hereto has taken into account the uncertainties, delays, expenses and exigencies of the litigation process, including the extensive depositions, document production, and other discovery taken to date in the Class Action and Related Proceedings. The Released Parties have each denied, and continue to deny, any liability, wrongdoing or responsibility for the claims asserted in the Class Action and Related Proceedings and believe that any and all claims for Liability are without merit.

4.3 The Parties hereto have evaluated the claims related to Liability asserted against the Released Parties, considering the nature and extent of the alleged injury and the alleged liability of the Released Parties.

4.4 CorVel is willing to enter into this Settlement Agreement so that all of the Released Parties will thereby be relieved and discharged from all Liability to all Class Members. In view of the present procedural status of the Class Action and Related Proceedings, the Parties recognize the necessity for a procedural means by which any negotiated settlement of all potential Liability asserted against the Released Parties may finally be resolved. It is expressly the intention of this Settlement Agreement that no claims whatsoever by Class Members or any of their Affiliates against the Released Parties arising out of an Episode will survive the approval of this Settlement Agreement.

4.5 The Parties agree that immediate payment to the proposed settlement fund and the management thereof pursuant to the Escrow Agreement and under the supervision of the Court would more likely result in greater benefit to the Released Parties and the Class Members than would continued prosecution of the Class Action and Related Proceedings. Accordingly, a class certified for settlement purposes in the Class Action meets the standards of articles 591, et seq . of the Louisiana Code of Civil Procedure so as to permit conditional certification of a settlement class. Accordingly, as more fully described in Section 7 below, the Parties will submit this



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Settlement Agreement to the Court via a Joint Motion for Preliminary Approval of Proposed Settlement and will marshal and present at any hearing thereon evidence to support the motion.

4.6 The PSC is entering into this Settlement Agreement on behalf of each of the Class Members and the Plaintiffs to terminate and settle all potential Liability of the Released Parties in recognition of (a) the existence of complex and contested issues of law and fact, (b) the risk, difficulty, and uncertainty of success associated with pursuing the claims asserted in this action, (c) the comparative degree of the alleged liability or culpability of the Released Parties, (d) the risks inherent in litigation, (e) the likelihood that future proceedings will be unduly protracted and expensive if these matters are not settled by voluntary agreement with the Parties, (f) the magnitude of the benefits derived from the contemplated settlement in light of both the maximum potential and likely range of recovery to be obtained through further litigation and the expense thereof and the exposure associated therewith, and (g) the determination by the Plaintiffs and its counsel that the settlement is fair, reasonable, adequate, and in the best interests of, and will substantially benefit, the members of the Class.

4.7 CorVel enters into this Settlement Agreement, notwithstanding its continuing denial of liability for alleged injuries and/or compensatory damages and/or statutory damages allegedly related to Liability, and notwithstanding its denials concerning causation of any alleged injuries and/or damages, to terminate the Class Action and Related Proceedings insofar as affecting the Released Parties, and to finally resolve all potential Liability, and to avoid further litigation, without any admission on the part of the Released Parties of any liability or fault whatsoever.

4.8 It is the intention and a condition of this Settlement Agreement, and the Parties agree, that the Class reserves all rights against any and all Insurers.

4.9 It is the intention and a condition of this Settlement Agreement, and the Parties agree, that as of the Effective Date, this settlement shall fully, completely, finally, and conclusively settle, compromise, and release all Liability of the Released Parties to Class Members and their Affiliates. Without limiting the foregoing, it is also the intention and a condition of this Settlement Agreement, and the Parties hereto agree, that upon the Effective Date, (a) the Released Parties shall be finally released from all Liability, by, through, or on behalf of each of the Class Members and their Affiliates, (b) the Class Action shall be dismissed as to CorVel, with prejudice and with each party to bear its own costs through dismissal, (c) the Released Parties shall be dismissed with prejudice from all Related Proceedings and with each



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party to bear its own costs, including costs paid through dismissal, (d) each of the Class Members and their Affiliates shall be forever barred and enjoined from instituting, maintaining, or prosecuting any action against the Released Parties with respect to the Released Parties' respective Liability, and (e) that as against any of the Released Parties, the exclusive remedy of all Class Members and their Affiliates with respect to any Liability shall be claims against the Class Settlement Fund as describ ed in the Settlement Agreement. Nothing in this paragraph is intended to limit the intention, condition and agreement set forth in Section 4.8.

4.10 It is the intention and a condition of this Settlement Agreement that the Final Order and Judgment be entered and become Final. The Parties agree to take all actions reasonably necessary and appropriate to fulfill and satisfy this intention and condition.

4.11 Without limiting the foregoing, it is the intention and a condition of this Settlement Agreement, and the Parties agree, that no Class Member or Class Member' s Affiliate shall recover, directly or indirectly, any sums for Liability, from any Released Party other than those received from the Escrow Account (or a subaccount thereof) under the terms of this Settlement Agreement. Nothing in this paragraph is intended to limit the intention, condition and agreement set forth in Section 4.8.

4.12 Without limiting the foregoing, it is the intention and a condition of this Settlement Agreement, and the Parties agree, that each of the Class Members and their Affiliates shall not attempt to execute or to collect any judgment or any portion of any judgment if such execution or collection could create liability of any Released Party in connection with any Episode, whether through contribution, indemnity or otherwise.

4.13 Without limiting the foregoing, it is the intention and a condition of this Settlement Agreement, and the Parties agree, that each of the Class Members and their Affiliates shall reduce, remit or satisfy any judgment, based, in whole or in part, on Liability of any Released Party that any Class Member and/or Class Member' s Affiliate has obtained or may obtain to the extent necessary to extinguish any claims against any Released Party, including but not limited to claims against any Released Pa rty for contribution, indemnity, subrogation, breach of contract, statutory violation, and/or tort.

4.14 Without limiting the foregoing, it is the intention and a condition of this Settlement Agreement, and the Parties agree, that the commencement and prosecution of any and all claims of the Class as a whole and/or the Class Members and/or their Affiliates individually against the Released Parties (including, without limitation, subrogation claims derived from or



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